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Securitization plan for social security debts

The Labor Ministry is examining a plan that would see the securitization of major debtors’ dues to the social security funds and the concession of their management to third parties.

According to the blueprint, the securitization process will include debts in excess of 200,000 euros each, to total about 13 billion euros. This way, ministry officials expect to soon collect a share of the debts from people deemed strategic defaulters.

Deputy Minister for Social Security Notis Mitarakis has already had contacts with banks to establish the options that such a plan would grant to the Single Social Security Entity (EFKA). Like all securitization plans, this is a difficult project, not to mention one that concerns debts to entities in the broader public sector which may lead to legal complications.

The plan will exclude debts that are already under settlements. However, the participation of debtors in the repayment mechanism for up to 120 installments has been limited. The deadline for inclusion is next Monday, September 30, and up to last Friday only 158,200 debtors to EFKA and the auxiliary pension fund, ETEAEP, had entered it, for dues adding up to 2.1 billion euros. An extension to the deadline appears possible.